Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.
posted 4 years ago
In the recent past, the European Commission has ruled that the Cupertino-based tech giant saved $14.3 billion in taxes from 2004–2014 by striking favourable deals with the Irish Government.
The European Commission (“EU”) has contested that the Irish government has entered into a deal termed as a “sweetheart deal” with, Apple which helped the tech giant to save taxes and pay taxes as low as .005%. Ireland has already got the lowest corporate tax rate i.e. @ 12.5%.
Under EU state aid rules, it is illegal for any country to give preferential treatment to one company over another when they are both subject to the same tax rules in that state.
Most of the tech giants have chosen Ireland as their headquarters. Apple has been based in Cork since 1980, and headquarters for social media giants Google, Facebook, Twitter and LinkedIn are also based in Dublin’s Silicon Docks. Apple itself is Ireland’s largest individual taxpayer.
The EU’s General Court has turned down the ruling of the European Commission of 2016, which held that Apple had been given illegal tax breaks by Dublin, Ireland. The ruling was challenged by both Apple and the Irish government.
Had this ruling been upheld, the Irish government would have received a favourable punishment of $14.3 billion in the form of punishment. However, Ireland considers the judgement as a relief, as it will continue attracting the funding of the tech giants.
As per Ireland, no added advantage is provided to Apple for incorporating its companies in Ireland, whereas the EU is of the view that this arrangement gave Apple an undue advantage that is illegal under EU state aid rules.
Further, until recently, US tax rules meant that payment of such tax could be deferred, and Apple was taking advantage of that. But those rules changed in 2017, and in 2018 Apple began paying $37 billion in tax on foreign profits to the US as a result. Approximately $21 billion of this relates to the time period (2004–2014) being covered by the Commission’s decision. Thus, even if the judgement is appealed and reversed, Apple would be eligible to claim the credit of taxes paid in the US against the liability arising towards Ireland.
In the past, EU has held the similar view with Starbucks tax dealings in the Netherlands and a division of fiat in Luxembourg. The mere premise by the EU General Court for overturning the apple demand is that the EU cannot justify that the lower tax payable by Apple is a “selective economic advantage” provided by Ireland to Apple. It is stated that:
“By today’s judgement, the General Court annuls the contested decision because the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU.
“According to the General Court, the Commission was wrong to declare that ASI and AOE (Apple Sales International and Apple Operations Europe) had been granted a selective economic advantage, and by extension, state aid.”
The judgement can be appealed by the EU, limited to points of law, and brought before the European Court of Justice within two months and ten days from the date of judgement.
Apple changed its structures in 2015, and thus the issue only involves the taxes until 2014.
posted 2 days ago
posted 2 days ago
posted 3 days ago
posted 3 days ago
posted 3 days ago
posted 3 days ago
posted 6 days ago
posted 6 days ago
posted 6 days ago
No results available
ResetFind the right Legal Expert for your business
Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.